India leads in valuation premium but not in EPS growth, shows data

As per an analysis done by CLSA, India price-to-earnings (P/E) multiple is nearly 30 per cent higher than its historical average

The domestic markets are the most expensive vis-à-vis their historical averages but the earnings growth is no longer the fastest.
 
According to an analysis by CLSA, India price-to-earnings (P/E) multiple is nearly 30 per cent higher than its historical average, while two-year compound annual growth rate (CAGR) earnings growth (FY 24-26) estimates stand at 14 per cent.
 
The top markets in terms of earnings growth expectations for the next two financial years are South Korea and South Africa. Despite leading the charts in terms of earnings growth, both countries are currently trading at a discount to their long-term P/E multiples.

 
Taiwan and Thailand are other markets expected to post higher earnings per share (EPS) growth than India and yet command a lower premium relative to their historical averages.
 
“Consensus forecasts put Nifty EPS growth at 14.9 per cent year-on-year (YoY) in FY25 and 12.3 per cent YoY in FY26, or a 13.6 per cent two-year earnings CAGR. While this can be said to be a steady and encouraging pace of growth, the Nifty is no longer the earnings growth leader among the world’s 19 biggest market indices,” said CLSA in a note.